Poland wants to be a hydrogen Kuwait. P2G can help

Hydrogen could drive low-carbon transport and also help reduce CO2 emissions. Although it is a distant perspective for now, the production of the element could support onshore wind farms – writes Piotr Stępiński, editor of BiznesAlert.pl.

More and more Polish companies see the potential of hydrogen, which is considered by many to be the fuel of the future, which can play the same role as oil in the 20th century. Hydrogen ambitions have been announced by PKN Orlen, Grupa LOTOS and JSW. Currently, hydrogen is obtained mainly from natural gas and crude oil. However, these are highly emission-oriented production methods. Nine CO2 particles are emitted when one hydrogen molecule is produced. However, there are other methods that allow zero-emission production. For this purpose, energy from onshore wind farms could be used. Its excess generated by the windmills could be used for the electrolysis process, whereby the water would decompose into oxygen and hydrogen. Thus, a Power-To-Gas (P2G) installation would allow for the storage of surplus green energy on the one hand, and on the other would contribute to the production of hydrogen, which could go to gas pipelines, where it would be mixed with methane.

The world is testing P2G, Germany is a leader

Such solutions are currently being tested in many places around the world. Few dozens of small projects are being implemented, e.g. in Japan or in the United States. At the same time, most of them are conducted in Europe, especially in Germany, which seem to be a leader in this area. For example, from May 2018, the P2G installation was launched in Falkenhagen. It is the result of cooperation of 27 entities from 6 countries. Thanks to it, it is possible to produce hydrogen using renewable energy. Then the hydrogen is subjected to a methanation process. The fuel is to be transformed into a synthetic natural gas, for which carbon dioxide from the bioethanol production plant will be used. As pointed out by Uniper, who participated in the project implementation, it makes an important contribution to the success of energy transformation. It allows to use hydrogen, among others for energy purposes or for heating purposes. According to the German company’s calculations, the new plant can produce 57 cubic meters of synthetic natural gas per hour, which corresponds to a production of around 600 kWh of energy. Interestingly, a year earlier, an installation was installed in Falkenhagen, which allows for direct injection of hydrogen directly into the gas pipeline network. According to the researchers, an admixture of 10 percent of hydrogen does not change the properties of gas pumped through pipelines.

Germany thinks about next projects. In mid-February, electricity and gas operators in western Germany, Ampion and Open Grid Europe (OGE) announced their readiness to build a 100 MW Power-to-Gas installation with hydrogen infrastructure in the Lingen area of ​​Lower Saxony. In addition, the project partners intend to transform the existing OGE gas pipeline into a dedicated hydrogen transport. In total, the project is expected to absorb around EUR 150 million.

Other operators want to reach for similar solutions. In October last year, the Gramwzielone.pl portal announced that TenneT, Gasunie Deutschland and Thyssengas have announced the plan of the “Element One” project, which will include the construction of an energy warehouse in power-to-gas technology, which will be built in Lower Saxony and will have a capacity of 100 MW. The installation is to be constructed in the vicinity of the transmission networks belonging to Tennet, which flow energy generated by German wind farms located in the North Sea. At the beginning of 2022, it would gradually become part of the system.

Poland is considering

P2G installations could prove to be important from the point of view of supporting the efforts of individual states to reduce CO2 emissions, and thus fulfill the growing ambitions of the European Union’s energy and climate policy. Such a solution could also be reached by Poland. In 2015, Polska Grupa Energetyczna and Gaz-System signed a letter of intent regarding the application of energy storage technology, involving the conversion of electricity into gas fuel. The leader of the Polish electricity market currently has 14 wind farms with a total capacity of 549,98 MW. A working group was established, composed of representatives of both companies. As a result of their work, a feasibility study for the P2G installation project was to be created. Since then, the effect of the work is small. The PGE press office informs the BiznesAlert.pl portal that the company is conducting studies related to its potential involvement in initiatives related to the production and use of hydrogen, which include thorough analysis of the economics of hydrogen technologies and regulations conditioning the possibilities of their implementation.

Costs are an obstacle

Gaz-System also pays attention to the costs. In a conversation with BiznesAlert.pl, spokesman for the company Mariusz Kozłowski stated that the company is constantly analyzing new technological solutions, taking into account the economic calculation and the effectiveness of the implementation of a given technology. P2G Commercialization is at a very early stage of development, with a limited number of pilot and demonstration projects. According to the calculations of the Oxford Energy Institute, taking into account the possible economies of scale, production costs could be 50-100 EUR / MWh for hydrogen and 100-150 EUR / MWh for methane. The prices for hydrogen are optimistic themselves. These could fall significantly if the surplus energy from wind and sun for gas production could be used. The calculations carried out by the Berlin research center Energy Brainpoll show that in such a situation hydrogen could be cheaper than gas. In turn, according to the estimates of the International Energy Agency, by 2040 gas prices will more than double, compared to 2020 – from 0,017 EUR / kWh to 0,041 EUR / kWh. At the same time, the prices of hydrogen produced from windmills could be lower by 0,018 EUR / kWh and amount to 0,021-0,032 EUR/kWh.

However, these estimates are subject to certain risks. It is also uncertain what the availability of renewable energy will be and the level of integration of green sources into the network, and this information is needed to start the P2G process. P2G technologies could support the widespread use of hydrogen and contribute to the decarbonisation of the energy sector to a certain extent. The need to decarbonise the sector could be a driving force for the development of P2G technology. This in turn would require expensive investments, and these can be difficult. Especially that P2G technologies are not strategic in the state policy, and there is no financial incentive for such projects. There is an interesting market opportunity on the horizon.